Dems, Issa Dispute AIG "Hypocrisy" Claims

March 21, 2009

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"It was disingenuous in the way that the administration came to us with a crisis which ultimately could not have been a crisis as described because the money has not, in any way, shape or form, been used as it was asked for," Issa said on PBS's NewsHour with Jim Lehrer on November 14.

Reached on Sunday, a spokesperson for Cummings confirmed that the Maryland representative did send the letter to Issa and Towns.

Jennifer Kohl said Cummings' office had not heard anything from Issa about AIG's retention program until last week.

She said Cummings had "multiple conversations with Towns since December" and that Towns, as chairman the only person who can schedule a hearing, had scheduled one for April 2.

Ron Stroman, a spokesman for Towns, said that due to the change in chairman from Rep. Henry Waxman, D-CA, to Towns, the committee had to hire a completely new staff and review all the material left over from Waxman.

"You've got to move deliberately here," Stroman said. "You want to make sure you've got all the information in place before you start sending out letters. And you want to have a staff in place. You want to move quickly, but you also want to move correctly."

Added Stroman, "The AIG issue is a complex issue and one that includes bonuses and other financial issues as well. In order to adequately plan a hearing, it's important that you have a full understanding of the scope of the problem and that your hearing is focused on those problems."

In the letter to Issa and Towns, Cummings stated, "I write today to request that you convene in the full Committee on Oversight and Government Reform a hearing to examine American International Group Inc.'s (AIG) use of taxpayer dollars, specifically with regards to compensation policies and expenditures and corporate events."

"In a series of letters to AIG, I have repeatedly requested information from the firm about the compensation it is providing to its employees -- and particularly about the so-called "retention payments" -- the firm is apparently awarding," Cummings said.

On Dec. 5 Liddy replied, telling Cummings that 168 employees would receive payments in the program.

On Dec. 9 Cummings wrote back to Liddy with more questions.

A week later, Cummings requested the hearing, calling for Liddy to testify under oath.

"I think it is critical that the Committee seek to understand whether (1) AIG has revealed the full extent of its compensation policies to officials with either the Department of Treasury or the Federal Reserve and (2) whether, if the Federal Reserve and/or the Department of Treasury are fully aware of AIG's compensation policies, either or both has approved AIG's issuance of retention payments (or any other type of bonuses) as part of the firm's compensation package. For that reason, I would urge that officials from these entities should also be called to testify at a hearing that examines AIG's compensation policies.

"As representatives of the taxpayers that are literally keeping AIG afloat, Congress has the right and indeed the duty to demand from AIG a full accounting of the funds provided to it. Therefore, I strongly urge you to convene a hearing as soon as possible."